As has now become known, a top manager named Jerry del Missier had incited his employees to falsify the Libor.
This instruction would have come from the very top and incriminates in this breath Bob Diamond (the former head of Barclays). In addition, the British central bank itself would also have been involved in this scandal.
The Libor is determined daily in London and determines to which conditions the banks lend themselves among themselves funds. Its level is considered a benchmark when lending to businesses and individuals.
Jerry del Missier has already admitted to falsifying the interbank interest rate at his first hearing. He instructed his staff to indicate a lower interest rate than the one that corresponded to reality. Bob Diamond had ordered him to do so at that time.
After the scandal became known, both had already resigned in July. Diamond, however, has rejected the blame and denied ever having given such instructions. Del Missier goes with its reproaches however still another step and incriminates now also the British central bank heavily. The British central bank (Bank of England) is the equivalent of the ECB in Frankfurt and the Federal Reserve Bank in NY. At the time, the central bank had been less than enthusiastic about the high interest rates and had given instructions to publish lower rates.
Regarding these facts, investigations are now underway worldwide against a large number of major banks. Among those affected are JPMorgan Chase, Citigroup, Bank of America and a number of other banks. The accusation is manipulation of market interest rates through incorrect information. The intention behind this is to record trading profits and cover up refinancing costs. Barclays has already confessed and agreed with authorities to a $500 million fine.
But some banks are less cooperative, like Royal Bank of Scotland in Canada. Here, the release of relevant documents was prohibited, as revealed by the New York Times.